How Many People are Unemployed? No One Knows
Today, the Bureau of Labor Statistics did what it does every month and released its employment figures. These showed that 51,000 people lost their jobs this month, and that the unemployment rate ticked up to 5.7%, which is a full percentage point higher than it was a year ago. Unsurprisingly, there were losses in both housing-related construction jobs and financial service industry jobs, as well as another 35,000 jobs eliminated in manufacturing. There was also a spike in unemployment for teenagers, now at 20%, whereas the unemployment rate for the general population is actually a not-so-dramatically bad 5.0%.
But these figures are, like all of the figures, are wrong, maybe not spectacularly wrong, but wrong enough that they will get revised over the next three months, then revised again over time, and in the end may look nothing like they do right now.
The household survey generates the unemployment rate and is based on a telephone survey of about 60,000 homes. That captures the self-employed and domestic workers. The payroll survey creates the non-farm employment number and is based on 400,000 businesses (though not all contacted directly -- some are reported from payroll agencies). The payroll survey usually fails to account for start-ups and very small businesses; the payroll survey also count jobs, not people, so someone holding down two payroll jobs is counted twice. There is often a wide discrepancy between the two surveys, and both numbers are subject to numerous seasonal adjustments (for holidays, weather, etc.) and other statistical tools meant to compensate for death rates, retirements, and other factors that can and do alter the size and composition of the work force and hence the ratios and stats that the bureau collects and reports.
For instance, the household survey defines employed and unemployed in the following manner:
"Employment is the total number of employed persons. Included are... self-employed persons, private household workers, agriculture workers, unpaid family workers, and workers on leave without pay during the reference period. Unemployed persons include those who did not have a job during the reference week, had actively looked for work in the prior 4 weeks, and were available for work. Actively looking for work includes activities such as contacting a possible employer, contacting an employment agency or employment center, having a job interview, sending out resumes, filling out job applications, placing or answering job advertisements, and checking union or professional registers. "
Now, if the BLS contacts you on the phone and you are over 15 years old, they will ask you if you have a job; if you say no, they will ask you if you have been looking, and for how long. If you have been looking for work more than 4 weeks or want a job but have stopped looking because you are discouraged, it may surprise you to learn that you are not unemployed; you are, in fact, not in the labor force and hence do not fully exist, at least statistically. If you have looked for a job at some point during the past 12 months but do not currently have one, you may get classified as "marginally attached to the work force."
These statistics are not the work of idiots, however arcane the methods. They are elaborately crafted databases attempting to provide a viable snapshot of a large and fluid population that with the ever-changing nature of work and the decline of massive payrolls is ever-harder to pin down.
However, the statistics are presented as if they were "the truth." Even more disturbing, they become reference points for key decisions and issues. Wall Street seizes on the data as indicators of how stocks should trade and what interest rates should be; economists extrapolate about the health and/or weakness of the system; and politicians and commentators use them to bolster whatever preexisting points they wish to make. In this report, Republicans may well say, hey, unless you're a teenager, the unemployment rate of 5.0% for adults isn't so bad. Democrats may well say, wait a minute, look at urban employment, employment for minorities, and anyone in the housing sector and it looks pretty grim. And back and forth, without any pause to consider that next month and the month after, these very figures will change by tens of thousands and sometimes hundreds of thousands, making the initial discussion almost totally off the mark.
The trends, of course, do matter, and over many moths, we can get a sense of how robust or weak things are. But our desire for certainty and reference points has turned these vague and loose statistics into Holy Grails of certainty. They aren't. That wouldn't matter in and of itself, but they're used for real-world decisions that have real-world implications. If you were told that you were heading north at 50 miles an hour when you wanted to head south at 40 miles an hour, you'd turn around and slow down. But if in fact you were heading west at 38, you'd end up lost or in an accident. That's what we're doing with our stats, and it's a wonder we're still on the road.
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The numbers have been cooked for a long time now as has been stated in earlier posts. The official numbers have so many deletions, disqualifications and caveats as to make the absolute numbers dubious at best. Maybe they show trends, but do not accurately show the scope of unemployment.
The REAL unemployment number in the US is about 15-18% and has been for a while. Getting wages less than you made 20 years ago is not having a real job. Having two part time jobs cause you can't find a job is not being employed either. Being off unemployment which ran out means you're not counted. Many people are unable to find employment. It's been a big problem for a long time, and wages have greatly declined. Mainstream media never talks or writes about it. I have the audacity of hope that we will be able to change things here in America after the thugs leave Washington in January.
That is the most accurate description of what is really going on
that I have read or heard about ... in years.
You obviously do not work for the government or a polling company,
In rough times take the percentage of unemployed and double it. In really bad times, triple it. Five percent unemployed means that 19 out of 20 people have jobs, which shouldn't even be a blip in the economy. People who play with numbers forget (or overlook) that numbers only reflect what is measured, which bears little resemblance to reality. After all, in the depths of the Great Depression, 7 out of 10 people had jobs. That doesn't sound so bad, does it?
They count those who sign up for temporary services as employed. A temp service finds jobs for people with companies whose worker didn't show up or is off because of sickness. Sometimes companies hire from temp services when they have more business than usual, like around Christmas time.
No one gets any benefits that work for the Temp services because you have to work over 30 plus hours.
A lot of people get laid off and start drawing Social Security. I don't know if they are counted as unemployed either.
There are many who lose a good job and replace it with a temp job. That is underemployment?
The figure never provides the total number of unemployed
This already deeply flawed unemployment number is rendered even more useless because it makes no distinction between full time and part time employment.
A worker who's hours are cut to 5 a week from 40 a week is counted the same from month to month.
Peripheral question - When the minimum wage went up recently there was news that if it had kept up with inflation since 1968 it would now be over $10.00 per hour.
What I want to know is what would the minimum wage be if it had kept up with Congressional pay raises; i.e. what would it be if every time Congress got a raise the minimum wage had gone up by the same percentage?
Well, you want to know whose fault that is go look in the mirror. Only in the US our government was able to give themselves automatic payraises of $ 15,000 per year while at the same time
they voted down the min. wage increase. We should be slapped for being so stupid. However,
no one really cares unless it hits them direclty in the pocket. Too bad for those of us who saw it
coming but can't do anything about it. Keep voting them in again this time around. Do not tie
their pay increases in with a balanced budget.
Here's a thought. The just released numbers are wrong and will be revised in the future. We know that because the previous numbers were wrong and had to be revised. Is it possible to look at the previous numbers and how they were later revised and get a rough estimate of how we should look at these numbers.
What I mean is this ... Take the numbers over the last seven years and look at the revisions. Are all or most of the revisions in the same direction? Same proportion? Initial reports are say something like 10% too optimistic? Or 20%? Or 200% ...?
If "THEY" are fudging the numbers, the bias should be obvious in comparing the long term trends in reporting the numbers.
The great thing about the unemployment figures is that once your benefits run out you're no longer "unemployed", you're just out of work.
CharlesJ. The next President, if he is wise, will ask Congress to establish a major initiative which places our skilled, knowledgeable and wiser older citizens in joint ventures with young people who are now under-employed or unemplyed or who are vegetating in barren institutions of higher education.
I read some supposedly trained, unbiased researcher proclaim that for every factory job there is .65 service job support, for example, insurance, financial, medical, dental, transportation, food, recreation and so on. Industry and technology is the basis of modern society. We have lost millions of industrial
What the unemployment figures do not show are the number of those that have been unemployed for such a long time that they are no longer elegible for benefits. I have been unemployed since March 2007, and due to factors beyond my control, my age is the major factor which I can not over come.
Point being is that there are many people out there that do not have jobs that can no longer qualify for unemployment benefits, thus they are not in the actual count.
Actually, "unemployment" figures show those without jobs actively seeking work, whether they're receiving benefits or not.
"Actively" seeking work means you've gone down to your state jobs office and gotten a referral within the reporting period, whether there's any hope of actually getting hired or not.
Doesn't show under-employment (part time workers seeking full time work) or discouraged workers (can't find a job and have given up hope).
Unemployment statistics are as accurate as the cost-of-living index, meaning they're skewed toward painting as rosy a picture as possible. I estimate the jobless rate here in Michigan is at least 40% higher than the official numbers suggest. That doesn't include the underemployed.
The government numbers are baked.
"Numbers racket: Why the economy is worse than we know " (Recommended reading)
By Kevin P. Phillips Harper's May 2008
Link: http://har
Kevin Phillips ROCKS.... Read his books about the Bushes and the first October surprise in 1979... you just have to wonder what is in store for Barack and his family this October.
Thanks for the link -- a great read. I've always suspected those statistics were way off, but it's nice to know why. The discrepancy between the stated figures of inflation and unemployment and what we perceive is huge.
Thank you for good reading.
I don't believe any numbers or reports issued by the federal government. Nor do I believe any "on the record" pronouncements from any official of the Bush Administration.
http://www
I take it that you prefer to bury your head in the sand.
Why would you think that?
I don't either.
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